Glossary of Key Trading Concepts
Risk‑First Trading
Risk‑First Trading is a system design approach where risk is defined before trade execution. It prioritises maximum acceptable loss, position sizing based on risk, predefined exits and capital protection. This approach treats risk as the foundation of trading decisions, not an afterthought.
Intraday Trading
Intraday trading refers to buying and selling financial instruments within the same trading session. Positions are opened and closed on the same day, and no trades are carried overnight.
Options Trading
Options trading involves contracts that give the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price within a defined time period. Option buyers face limited risk but time‑sensitive decay and volatility exposure.
Intraday Options Trading
Intraday options trading involves buying and selling options within the same trading session. It requires strict risk control due to high leverage, rapid price movement, time decay and volatility shifts.
Retail Option Buyer
A retail option buyer is an individual trader who purchases option contracts for speculative or hedging purposes. Retail option buyers are particularly sensitive to position sizing errors, emotional decision‑making and over‑leveraging.
Risk Per Trade
Risk per trade refers to the maximum amount of capital a trader is willing to lose on a single trade. It is usually expressed as a fixed amount or a percentage of total capital.
Position Sizing
Position sizing is the process of determining how many units or contracts to trade based on predefined risk. Proper position sizing aligns exposure with acceptable loss limits rather than conviction or confidence.
Stop‑Loss
A stop‑loss is a predefined exit point where a trade is closed to limit losses. In risk‑first systems, stop‑loss levels are decided before entry and are not adjusted emotionally.
Target
A target is a predefined exit level where profits are realised. Targets are defined as part of a structured risk‑to‑reward plan, not as guaranteed outcomes.
Risk‑to‑Reward Ratio (R:R)
The risk‑to‑reward ratio compares the potential loss of a trade to its potential gain. It helps traders evaluate whether a trade aligns with their risk framework, not whether it will succeed.
Capital Protection
Capital protection refers to practices designed to preserve trading capital over time. It focuses on limiting drawdowns, preventing large losses and maintaining long‑term participation in markets.
Drawdown
Drawdown is the reduction in trading capital from a peak to a subsequent low. Risk‑first systems aim to control drawdowns rather than eliminate losses.
Execution Discipline
Execution discipline is the ability to follow predefined rules without deviation during live market conditions. It is often compromised by emotion, stress or overexposure.
Automation in Trading
Automation in trading refers to using software to enforce predefined rules during execution. Its purpose is to reduce emotional interference, improve consistency and enforce discipline. Automation does not guarantee profits.
Trade Journaling
Trade journaling is the process of recording trade details such as risk, execution and outcome. Journals are used to evaluate process quality rather than individual results.
Market Prediction
Market prediction involves attempting to forecast price direction or outcomes. TradeBoTicks systems do not rely on prediction and instead focus on managing uncertainty.
Strategy
A trading strategy defines entry logic or market participation rules. Strategies are treated as inputs within a risk‑first system, not as the foundation of trading success.
System‑Based Trading
System‑based trading refers to executing trades within a predefined framework that governs risk, sizing and exits. The system prioritises consistency and repeatability over discretionary decision‑making.
Copy Trading
Copy trading involves automatically replicating trades from another trader’s account. Risk‑first systems require that copied trades still follow predefined risk and position sizing rules.
Volatility
Volatility refers to the degree of price movement in a financial instrument. Higher volatility increases both opportunity and risk, making risk control essential.
Discipline
Discipline in trading refers to the consistent application of predefined rules regardless of outcomes. It is a learned behaviour reinforced through structured systems.
Why These Definitions Matter
Clear definitions reduce ambiguity. TradeBoTicks believes that most trading mistakes arise not from lack of information, but from unclear thinking around risk and discipline. These definitions form the conceptual foundation of everything we build — including OptionTurtle, our intraday options risk‑management platform.